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of :he contracting firm and his salary or any other
<br />financial interest is not affected by the contract,
<br />the council may determine that no personal
<br />financial interest'under M.S. 471.87 exists and
<br />that the contract may be made and enforced
<br />in a home rule city without a charter provision
<br />prohibiting direct or indirect interest. (A.G. Op,
<br />90-E-5, LMC 130d, Nov. 13, 1969.)
<br />
<br /> It is now clear that M.S. 412.311 and similar
<br />charter provisions are broader than M.S. 471.87
<br />with respect to the type of interest prohibited.
<br />Specifically, the Court has held that mere employ-
<br />nnent by a company with which a city contracts
<br />may give the council member an indirect interest
<br />...... e contract, when it remanded, the matter
<br />back to the trial court for findings on this point.
<br />(Singewald v. 3~linneapolis Ga, Co., 274 Minn.
<br />!42 N.W. 739, 1966.) That case overrules a line
<br />of opinions by the Attorney General holding
<br />that non-participating, non-supervisory salaried
<br />~mployees are not within the conflict of interest
<br />prohibitions. (A.G. Op. 90-B-7, LMC 130d, July 1,
<br />'i96-6; A.G. Op. 9D-E-2, LMC 130d, June 20,
<br />1962; A.G. Op. 90E, LMC 13Od, Mar. 18, 1940.)
<br />Presumably, other types of interest may also be
<br />such prohibited indirect interest and yet not
<br />constitute a personal financial interest under
<br />M.S. 471.87, but there have been no further
<br />· z~es on !he subject. The Attorney General has
<br />rd,e..l that where a housing authority commissioner
<br />is subject to statutory language regarding direct
<br />or indirect interest (M.S. 462.431) similar to but
<br />~omewhat strongerthan that found in the Statutory
<br />City Code, a commission member is covered by
<br />ti~e statutory language where he is a foreman for
<br />a contractor who will aid the contractor in making
<br />a bid to the housing authority. {A.G. Op. 430, LMC,
<br />130d, Apr. 28, 1967.) .
<br />
<br />' 7¥me factor in determining interest. When the
<br />· .~nterest of the official exists at the time the con-
<br />tract is to be entered into, it is clear that the
<br />contract is prohibited .when the contract is within
<br />the statutory prohibition. The Attorney General
<br />has even ruled that a person may-not contract
<br />with a statutory city where he is a councilman
<br />a'~ the time of opening of bids even if he resigns
<br />prier to the actual awarding of the contract.
<br />(A.G. Op. 90A-l, LMC 130d, Nov. 20,'1963.)
<br />
<br /> More difficult questions are sometimes
<br />presented when 'the council member takes
<br />office after the contract has been entered into. If
<br />no conflict of interest between the council mem-
<br />ber's public duty and his private interest in the
<br />contract can develop during the effective period
<br />of the contract after the member assumes office,
<br />the statutes are probably not violated and the
<br />council member may serve. Where that is not the
<br />ca~, service on the council by the interested
<br />member may not be possible if he retains his in-
<br />terest. Thus the Attorney General has ruled that
<br />the principal stockholder and president of a
<br />
<br /> company hol~ling a city franchise which calls for
<br /> extensive council regulation of the company
<br /> during the term of tee franchise may not serve
<br /> on the council during that period without first
<br /> divesting himself of direct or indirect interest
<br /> in the company. (A.G. Op. 90a-l, LMC 130d,
<br /> July 12, 1973.) On the other hand, when a city
<br />· has entered into a 20-year contract with a ma[ting
<br /> company allowing the company to use,the c~ty's
<br /> sewage disposal plant and fixing rates for such
<br /> service subject to negotiation of new rates under
<br /> certain circumstances, a director and stockholder
<br /> of the company may, during the term of the
<br /> contract, assume office as councilman and continue.
<br /> to serve as such as long as'no new negotiations are
<br /> required. In case new negotiat!ons for change in
<br /> the terms of use are entered into, a new agreement
<br /> may not be consummated as long as the interested
<br /> council member continues in office. {A.G. Op.,
<br /> letter opinion~ to Cannon Falls, LMC, 13Od, Apr.1,
<br />
<br /> · In an opinion given later in the same year,
<br /> the' Attorney General ruled that when a member of
<br /> a governing body purchases a laundry a significant
<br /> part of whose business is furnished to the govern°
<br /> mental unit under a contract previously entered
<br /> into, the board member may have a prohibited
<br /> interest in the contract~ since questions of contract
<br /> interpretation or performance may arise-as a result
<br /> of which the member would be faced with a con-
<br /> flict of interest; however, this is a fact question
<br /> which must be answered by the governing body.
<br /> (A.G. Op., letter opinion to 'ind. School Dist.
<br /> 742, St. Cloud, LMC 130d, May 16, 1952.) See
<br /> also A.G. Op. 901:-1, LMC 130d, Dec. 6, 1955,
<br /> holding that an alderman who had resigned was
<br /> not eligible to become a subcontractor on a muni;
<br /> cipal hospital where he had been a member of the
<br /> council when the prime contract was awarded. The
<br /> statute should be interpreted as precluding a con-
<br /> tract with any Person who, as a public official, has
<br /> had the opportunity to influence the terms of the
<br /> contract or the decision of the governing body
<br /> thereon prior to approval. {A.G. Op. 90e.-1, LMC
<br /> 130d, May 12; 1976~)
<br />
<br /> On' the Other hand, the Attorney General
<br />has' held that a council member is eligible to
<br />municipal office even though he is entitled to
<br />commissions on insurance premiums payab!e
<br />by the city under a contract entered into prior'
<br />to his becoming a council member. {A.G. Op.
<br />90-a-l, LMC 130d, Mar. 30, 1961.) See also
<br />£eaudry-v. Valdez, 32 Cai. 26.9 (1867) holding
<br />that the validity of a street mmprovement con-
<br />tract is not affected by the fact that the mayor,
<br />before his election, had been assigned the contract
<br />as security for a debt due him by the contractor,
<br />nor did that fact incapacitate him from counter-
<br />signing warrants for the collection of the assess-
<br />mont. ·
<br />
<br />A review of the cases and Attorney General's
<br />
<br />
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